Siedle believes that the feeder funds investing with Madoff "were all aware that Bernard L. Madoff was engaging in illegal conduct ... and intentionally chose to participate in and support Madoff's illegal conduct to reap enormous illicit financial benefits, " according to the affidavit.
This latter argument distinguishes between reporting schemes applicable to conduct engaged in openly (such as selling fruit subject to price controls) and conduct that is otherwise concealed (such as operating an illicit gambling operation).